EXHIBIT 12
CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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Three months ended |
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Six months ended |
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July 2, |
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June 26, |
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July 2, |
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June 26, |
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2006 |
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2005 |
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2006 |
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2005 |
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Millions |
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Earnings |
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Earnings before income taxes and minority interests |
$ |
299 |
$ |
207 |
$ |
527 |
$ |
342 |
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Add: |
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Fixed charges |
35 |
36 |
71 |
72 |
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Amortization of capitalized interest |
2 |
1 |
3 |
2 |
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Distributed income of equity investees |
17 |
50 |
34 |
57 |
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Less: |
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Equity in earnings of investees |
(34 |
) |
(32 |
) |
(60 |
) |
(60 |
) |
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Capitalized interest |
(1 |
) |
(1 |
) |
(2 |
) |
(1 |
) |
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Earnings before fixed charges |
$ |
318 |
$ |
261 |
$ |
573 |
$ |
412 |
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Fixed charges |
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Interest expense |
$ |
26 |
$ |
28 |
$ |
53 |
$ |
56 |
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Capitalized interest |
1 |
1 |
2 |
1 |
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Interest portion of rental expense(1) |
8 |
7 |
16 |
15 |
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Total fixed charges |
$ |
35 |
$ |
36 |
$ |
71 |
$ |
72 |
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Ratio of earnings to fixed charges |
9.1 |
7.3 |
8.1 |
5.7 |
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(1) Amounts represent those portions of rent expense that are reasonable approximations of interest costs. |